This project has demonstrated that: 1. the induction of scleral cartilage by pigmented epithelium (P.E.) in the domestic fowl is mediated by cell-free, basement membrane produced by the P.E.; 2. clones of chick embryonic P.E. cells respond to dibutyryl cyclic 3',5'- adenosine monophosphate similarly to cultures of transformed-cell lines; 3. a barrier to passage of ruthenium red develops in the chick corneal epithelium at 14 days of incubation, at the time the corneal stroma begins to dehydrate.